Figure 10-12
Figure 10-12 shows the cost and demand curves for a monopolist.
-Refer to Figure 10-12.What is the amount of consumer surplus if,instead of monopoly,the industry was organized as a perfectly competitive industry?
A) $21
B) $124
C) $186
D) $332

Question

Figure 10-12
  Figure 10-12 shows the cost and demand curves for a monopolist.
-Refer to Figure 10-12.What is the amount of consumer surplus if,instead of monopoly,the industry was organized as a perfectly competitive industry?
A) $21 
B) $124 
C) $186 
D) $332

Quizplus · Accepted Answer

In a perfectly competitive market, consumer surplus is maximized because the price is equal to the marginal cost. The consumer surplus is the area above the price level and below the demand curve. In this scenario, the consumer surplus is $332.

Figure 10-12 Figure 10-12 Shows the Cost and Demand Curves